Urgent Help - TN payroll

V

vick411

New Member
Hello,

I have got a contract in US. I would need to understand feasibility and complexity of payroll.

1. Can I work on TN under corp to Corp arrangement ? it is understood that TN is not through my corp but through the corp that I am employed.

2. If above is feasible, should I open a new corp in US(I have many family members in US who can be directors to open this corp) or should have my Canadian corp registered in US?

3. Do I have to pay Canadian taxes if I open a new corp in US?

4. any accountant that you recommend for the above ?

appreciate your help.
Priti
 
1. Yes. It can even be your own corporation. As long as you have a CLIENT that sponsors you.
2. It doesn't matter. It can be your corporation. No need to create a fake company.
3. Only if you continue to live in canada.
 
more clarification:


If I were to have a US corporation only the everything seems to be logical - pay us taxes and be non-resident of Canada for tax purpose.

But for a Canadian corporation - As I understand - I would have to pay Canadian taxes if it is Canadian corporation (foreign taxes). how would I draw the salary from a canadian corp as a US employee?

I guess I did not understand.

Priti
 
nelsona said:
if you are living and working in US, why would you set up a Cdn corporation?
Click to expand...

Just wondering, won't IRS and uscis have issues if a person is on the payroll of his own company rather than his sponsoring company? For instance if that same individual later want to go for a GC, how would he be able to justify his payroll from his own company as oppsed to his tn sponsor? Whom would be considered his employee during that time?
 
TN only requires sponsorship by a US corp. The manner of payment is unimportant. Corp to corp is fine and would not be questioned by CIS or IRS.

To be sponsored for GC, the sponsor would have to be prepared to hire the worker as an employee upon award of GC, he could not continue corp-to-corp as this is not a basis for a EB card.

But, up until then, corp-to-corp would be perfectly legit, and would not bring up any issues at AOS or CP processing.
 
Thanks Nelsona and I do agree with your reply. However, I have dealt with employers that are not even willing to go 1099 let alone C2C. One of them gave me this explanation that he got from Grasmick:

"Both the TN visa and the H-1B visa are issued to temporary EMPLOYEES. Self-employed professionals, including 1099 and incorporated independent contractors, are precluded from obtaining TN-1 status, and the INS has advised its field offices that the E-2 "treaty investor" classification may be the appropriate alternative for these types of Canadian professionals, http://www.grasmick.com/invest.htm. The E-2 is complex and more difficult to qualify for. For this reason, Canadian contractors seeking work in the U.S. are generally advised to work as W-2 contract employees through a third party employer of record."
 
This is incorrect. It goes to the definition of "self-employed" vs "self-sponsored'. If 1099 is self-employed, but his work is completely directed by his sponsor, it is fine.

This issue has been put to bed long ago, but I susupect the answer he got was far outdated. Grasmick does not maintain his website very much any more.

In any event, why are you asking this in context of GC? It has nothing to do with GC.
 
Self-employment also clearly conflicts with the intent of the NAFTA Implementation Act and its accompanying Statement of Administrative Action, which states, at page 178, “Section D of
Annex 1603 does not authorize a professional to establish a business or practice in the U.S. in which the professional will be self-employed.” In this regard, Section B of Annex 1603, which deals with “traders and investors,” establishes the appropriate category of temporary entry for a citizen of a Party country seeking to develop and direct investment operations in another Party country. Canadian or Mexican citizens seeking to engage in self-employment in trade or investment activities in the U.S., therefore, must seek classification under section 101(a)(15)(E) of the INA.

Although the issue of self-employment was never specifically addressed under the regulations promulgated by the INS pursuant to the CFTA Implementation Act, the bar on establishment of a business or practice in which the professional will be self-employed is consistent with the intent of the U.S. and Canada in entering into the CFTA. Since entry into NAFTA was not intended to substantively change the treatment of professionals, this explicit bar merely clarifies existing law.

Note that the bar on establishment of a business or practice in which the Canadian or Mexican citizen will be self-employed is in no way intended to preclude a Canadian or Mexican citizen who is self-employed abroad from seeking entry to the U.S. pursuant to a pre-arranged agreement with an enterprise owned by a person or entity other than him/herself located in the U.S. On the other hand, a Canadian or Mexican citizen is precluded from entering this country in TN classification for the purpose of rendering pre-arranged services for a U.S. corporation or entity of which he or she is the sole or controlling shareholder or owner or over which he or she holds de facto control.
 
Yes, note what it says:
...in no way intended to preclude a Canadian or Mexican citizen who is self-employed abroad from seeking entry to the U.S. pursuant to a pre-arranged agreement with an enterprise owned by a person or entity other than him/herself located in the U.S.
Click to expand...
That is called TN sponsorship, which is perfectly fine.

working in 1009, you are working FOR and rensdering services TO the client, not FOR your own company. The TN issued is based on sponsorhip by USCorp, not Mycorp.

From the NAFTA handbook:
A professional will be deemed to be self-employed if he or she will be rendering services to a corporation or entity of which the professional is the sole or controlling shareholder or owner [bold mine].
Click to expand...
CBP has consistently interpreted this as meaning you simply need a sponsor for each client.

As I said, self-sponsorship is what is disallowed, not self-employment -- as can be attested by dozens of TNers on this and other websites.

But, if this makes you uncomfortable, simply get a job where you are paid by W2.
 
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